If your credit score is 692, you find yourself squarely in the middle. According to Experian, the average American consumer boasted a FICO Score of 714 as of 2021. Anything ranging from 670 to 739 is generally considered a good credit score.
Most lenders view a 692 credit score as average, indicating a general adherence to timely bill payments. In this article, we'll delve deeper into what a 692 credit score entails when applying for loans and explore ways to enhance your credit standing.
What does a 692 credit score mean?
As mentioned, a 692 credit score falls within the bracket generally deemed good credit. Lenders often consider this range for loan approval. However, it does not reach the "very good" or "exceptional" credit tiers, making it less likely to qualify for a lender's best interest rates or loan terms.
Borrowers with a 692 credit score are seen as relatively low risk in repaying debts. Statistical default rates range from 4.6% for those with a 660-679 FICO Score to 1.9% for individuals in the 720-739 range. While your score doesn't indicate bad credit, many borrowers in the good credit range may have late payments, limited credit history, or adverse credit information (such as a loan default) from several years ago. Consequently, lenders tend to exercise a bit more caution.
Can I get a credit card with a 692 credit score?
Yes, you should be able to secure a standard (non-secured) credit card with a FICO Score in the realm of good credit scores. However, there are notable caveats.
Primarily, you are unlikely to qualify for some of the best credit card offers in the market. To access premier rewards credit cards, balance transfer offers, and the best 0% APR offers, lenders may prefer excellent credit scores significantly higher than yours. Additionally, your credit limit might not be as high as that for consumers with higher scores.
Secondly, your credit score is just one facet of the credit card approval process. Lenders will also consider your other debts and employment situation. In fact, it's not uncommon for consumers in elite credit tiers to face rejection due to relatively high other debts.
Can I get an auto loan with a 692 credit score?
Certainly. A 692 credit score will qualify you for an auto loan if your income justifies it. However, your credit score can significantly impact the interest rate you receive, especially in auto lending.
According to MyFICO, as of November 2022, the average APR on a 60-month new auto loan for someone with a FICO Score of 720 or higher is 5.64%. With a score in the 690-719 range, it's 6.83%. For a borrower with a score in the 660-689 tier, the average APR is 9.19%. To put this in context, on a $40,000 new car loan, someone with a 730 would pay about $4,000 less in interest than a borrower with a 680, even though both scores fall in the "good credit" category.
Recommended next reads
Interest rates can also vary significantly among lenders, even for borrowers with the exact same credit score. Therefore, it's essential to shop around for the best loan terms when buying a home or car. The FICO credit score model encourages rate shopping, as any inquiries on your credit reports for the same type of loan within a short period (usually two weeks) count as a single inquiry for scoring purposes, thus not adversely affecting your credit score.
Can I get a mortgage with a 692 credit score?
Yes, you should face little trouble qualifying for a mortgage based on your 692 credit score, provided your income, employment situation, and assets justify the loan. Conforming mortgages, which are conventional loans meeting Fannie Mae or Freddie Mac standards, require a score of 620, while FHA mortgages with low down payments require a 580. Your score places you comfortably over both thresholds.
Nevertheless, you're unlikely to qualify for a lender's best mortgage rates, typically reserved for borrowers with very good or exceptional credit scores. With a 692 credit score, you should qualify for rates on par with national averages.
Additionally, even though your score qualifies you for a mortgage, it's crucial to understand that the lower your score, the stronger the rest of your qualifications are generally expected to be. For instance, based on Fannie Mae's latest lending standards, you can secure a mortgage with a debt-to-income ratio (DTI) as high as 45% with a standard 20% down payment if you have a credit score above 720. If not, your DTI is capped at 36%.
Can I get a personal loan with a 692 credit score?
You can obtain a personal loan with a 692 credit score, but not every lender may approve you. Some lenders require scores well into the 700s for consideration. Depending on the lender, however, you may secure a personal loan with competitive terms.
Personal loans powered by Upstart are designed primarily for borrowers with credit that may not be top-tier but are still considered credit-worthy based on non-traditional variables. Consider checking loan offers from Upstart if you're in the market.
Take your 692 credit score with a grain of salt
As mentioned, there is no universal definition of a "good" credit score, and different lenders use credit scores to varying extents in their lending methodology. No metric, including the widely-used FICO Score, is a flawless predictor of consumer behavior. In fact, a 2021 study by professors at the University of Pittsburgh found that traditional credit scoring misclassified default risk for about 30% of consumers, especially lower-income and younger consumers.
Upstart, in particular, aims to look beyond a borrower's credit score and consider the full picture of their financial and life situation. This approach provides qualified borrowers, who might have less-than-ideal credit scores, access to borrowing they need and deserve.
How can I make my good credit score great?
With a 692 credit score, you are comfortably above poor credit but still in the middle range. If you aim to elevate your credit score, consider these smart steps. While every consumer is unique with a distinct credit history, the following are general guidelines to improve your credit score:
